Abstract
Purpose: The main purpose of this article is to study the IFRS implications of COVID-19 for selected travel and leisure companies listed on the JSE. The article investigates how these selected companies disclose financial information regarding the going concern, or in other words; the sustainability of the company, revenue of the company, how the companies made estimations, and more, to account for the impact of the coronavirus pandemic on their financial information. Design/methodology/approach: content analysis was used to analyse the financial statements of ten travel and leisure companies listed on the JSE. This analysis indicated what additional disclosures these companies have in the light of COVID-19. Findings: even though there is no specific IFRS standard providing guidance on the impact of COVID-19, the findings reveal that the companies took utmost care in disclosing information and the impact of COVID-19 in the financial statements. Companies cautiously considered the impact of the coronavirus on their financial results and provided the users of these financial statements with transparent financial information, regarding going concern and sustainability of the company, revenue, estimations, and more. Originality/value: a new economic crisis, different from any other economic crises, emerged as a result of COVID-19 and the IFRS implications such as, the effect on sustainability and going concern, impact on revenue of companies, financial estimations during the coronavirus pandemic, the effect of COVID-19 on the financial subsequent events and other financial statement disclosures is still unclear. This study is deemed of vital importance as the users of financial statements require all the necessary information about how COVID-19 has affected these companies, and whether or not these companies will be sustainable in the foreseeable future, as to enable the financial statement users to make informed financial decisions.
Highlights
At the end of 2019, the novel coronavirus, COVID-19, was detected in Wuhan, a city inChina [1]
The objectives of this article are firstly to examine the International Financial Reporting Standards (IFRS) implications of COVID-19 for a selection of JSE-listed travel and leisure companies that qualified for the extension period granted by the FSCA and, secondly, to identify the additional disclosure prepared by these companies in light of the coronavirus
A document content analysis was performed to examine the IFRS implications of COVID-19 on the selected travel and leisure companies listed on the JSE
Summary
At the end of 2019, the novel coronavirus, COVID-19, was detected in Wuhan, a city inChina [1]. As a result of the rapid rate at which the virus spread across the world, the World. Health Organisation (WHO) made the assessment on 11 March 2020 to categorise this virus as a global pandemic [2]. Governments across the world adhered to the advice of the WHO and, as a result, most countries introduced and implemented partial or full lockdown protocols [4]. Great uncertainty about this virus was observed. Uncertainties about the rate of infection; the development of a vaccine; whether or not a second wave of COVID-19 will be experienced; the impact of the new virus on the global economy; how the virus and lockdowns will affect consumer spending; how individual and corporate travel will be affected; the impact of the pandemic on businesses [5]
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